Gender Pay Gap: No Significant Improvement in Year Since Mandatory Reporting Introduced

By Charlotte England, Freelance News Editor 5 Apr 2019
Equality, Women

Almost eight in 10 organisations continue to pay men more than women, according to new figures released today as companies with more than 250 employees were forced to publish their gender pay gap for the second year in a row.

Overall there has been no significant improvement in the gender pay gap in the past year, with the national average narrowing by just 0.1%. Meanwhile, at four in 10 organisations, the gap has actually worsened. Less than half of companies have successfully reduced the gap.

It is unclear exactly how many organisations met the deadline of midnight on 4 April, but the Guardian reported that 9,961 had filed by 5pm and of those 7,755 paid male employees more.

The figures are based on median hourly pay, which means that rather than comparing the salaries of individuals in the same job role, the total salaries of all men in an organisation and all women in an organisation are added together and divided by the number of hours male employees and female employees work respectively.

The Conservative Party introduced mandatory annual reporting last year in a bid to improve the situation and the Equality and Human Rights Commission (EHRC) has said it will take action against organisations that have not reported.

BBC analysis shows that Garage chain Kwik Fit, Interserve FS (part of the Interserve Group), and car retailer Inchcape are among companies where the gap has widened the most.

Meanwhile, the three companies with the biggest gaps were Countrywide Services at 60.6%, Independent Vetcare at 48.3% (50.5%), and Easyjet at 47.9% (45.5%).

What Next?

a woman working in an office -workers' rights aren't part of the human rights conventionImage via Unsplash

The Fawcett Society, which monitors and campaigns to close the gender pay gap, said that while the lack of improvement was disappointing it was not surprising: more action must be taken to make a real difference.

While campaigners welcomed the Conservative party’s decision last year to introduce mandatory pay gap reporting for companies with more than 250 employees, there is currently no disincentive for companies that do not improve their figure.

The Fawcett Society says the reasons women are paid less on average are complicated and entrenched. They include discrimination, the historical dominance of men in senior positions and the undervaluing of work traditionally done predominantly by women. Unequal care responsibilities are also a factor, with ECHR research suggesting 54,000 mothers a year are forced to leave work early as a result of pregnancy.

The problem penetrates almost all sectors of the economy and is not confined to low paid work, with university graduates across full and part-time work facing a pay gap of 23%.

Given the scale and institutional nature of the problem, more must be done or mandatory reporting risks being only a tokenistic gesture.

Sam Smethers, Chief Executive of The Fawcett Society, said her organisation wanted the government to be harsher on companies. “It’s time for action plans not excuses,” she said.

She added:

Gender Pay Gap reporting has started a conversation in our workplaces that wasn’t happening before. For many employers it is the first time that they have even looked at the differences in men’s and women’s pay in their organisation. But we also need to tackle all the causes of the pay gap.

Next steps could include introducing more generous leave for fathers, so that care duties can be more easily split between men and women, and making every job flexible by default. But, Smethers said, a zero tolerance approach must also be taken to pay discrimination.

women working on a computerImage via Unsplash

“One of the many reasons women earn less on average than men is pay discrimination,” Smethers said. “Even though it was outlawed almost fifty years ago we know from our Equal Pay Advice Service that it is still happening.  Gender pay gap reporting does not give women the information they need to challenge unequal pay.  For that, they need to know what their colleagues earn.”

Smethers said employers should be made to conduct audits and set up transparent pay frameworks. Her organisation is also calling on employers to set out a five-year strategy on how they will close their gender pay gaps, monitoring progress and results.

“[The] Government needs to require employers to publish action plans that we can hold them accountable to, with meaningful sanctions in place for those who do not comply,” Smethers said.

The Labour Party has responded to calls for action with leader Jeremy Corbyn committing to forcing all large employers to prove how they will tackle their gender pay gaps, or face fines. “Companies that do not close their gaps won’t get government contracts,” he added in a Tweet.

At the time of writing, the Conservatives had not committed to action, although the party, which does not have 250 employees, voluntarily published a limited set of figures on its own gender pay gap, which shows that in Conservative HQ it is 15.7% in favour of women.

This does not include staff working directly for MPs, however, and doesn’t touch on official figures released in December which showed a gender pay gap existed in every core Government department.